Kids make mistakes. This is a commonly accepted fact of life. While learning to ride a bike, they fall and scrape a knee. Proudly displaying a flower picked from mom’s prize garden, they rush into the house. Naturally, the trail of mud leads straight across the new, white carpet.

When these things happen, what should parents do? Should they never forget the incident, telling their child to give up and never try again? Of course not! They should never allow their children to be locked into the past by mistakes. Instead, they should encourage them to learn from the mistake and move on.

As an adult, you are faced with a similar question. What will you do about your financial mistakes? Will you carry them with you, refusing to ever move on? Will you give up? Or will you learn to leave the past behind you so you can move on in your life? Remaining trapped in pain and failure accomplishes nothing; you must learn to let go of the past if you are to succeed in your finances in the future.

Obviously, this doesn’t mean you entirely forget your past. Instead, you acknowledge that it happened. It is over. It no longer controls you. Rather than being trapped by it, you are free to chase your dreams and goals.

You cannot improve your financial future without first accepting the past. Learn from it, and move on. The past is for teaching, not for stopping.

Spending your time equals spending your life.

(This blog is a continuation of yesterday’s blog)

There is one more piece to this process I want you thinking about. I want you thinking about what things cost you in hours worked. When you go to work you are exchanging your life (time) for money. Here are some examples.

Let’s assume you make $25 per hour.

1. You will have to work 61.32 hours to bring home enough money to buy the $1,000 couch. That means working just shy of 8 full work days.

2. You will have to work 4.6 hours to bring home enough money to pay for a $75 night on the town.

3. You will have to work 1,840 hours to bring home enough money to buy the $30,000 vehicle. That means working 46 weeks. That’s right…almost a FULL YEAR!!

Let’s assume you make $15 per hour.

1. You will have to work 102.2 hours to bring home enough money to buy the $1,000 couch. That means working just shy of 13 full work days.

2. You will have to work 7.65 hours (a whole day!!) to bring home enough money to pay for a $75 night on the town.

3. You will have to work 3,066 hours to bring home enough money to buy the $30,000 vehicle. That means working just shy of 77 weeks or about 1.5 years. (This vehicle will go down in value too but that is a topic for another day).

Is it worth it?

I’m not against buying couches, nights out, vehicles, or other items. My goal with this article is for you to understand and calculate the real cost of every item you purchase.

You have a choice, and the choice is yours. – Coach Bryan

(Note: a. For those of you who participate in biblical tithing (10%), your factor is 170% instead of the 153% so you would need to earn around $1,700 to have enough to buy the $1,000 couch. b. Tax percentages may be different for your situation).

Thank you for reading the My Financial Life Coach blog where we talk about money, goals, family, life events, spending, and economic news. We do make every attempt to avoid the topic of politics but we will bring up economic policies that need communicated. Our job is to educate and motivate you to the debt-free life style.

How much?

One thing I have found to be consistent over the past 20 years when working with folks is that they do not understand the real cost of the purchases they make. I always ask the question “How much does a $1,000 couch cost?” When I ask this I normally hear “Am I paying cash or am I charging it?” For the following example the assumption is cash.

Only a $1,000, Right?

You are looking to buy a $1000 couch, and you say, “It is only $1,000.” Right? Wrong. Let’s look at what it really costs to make that purchase.

Taxes and More Taxes…

First, let’s assume you need to pay sales tax of 7%. So now you need to come up with $1070. But you actually need to earn more money because where I come from there are taxes to pay such as federal tax, city tax, state tax, and FICA. Let’s assume you are in a 15% federal tax bracket, 6% state, 2% city, and your portion of FICA. That means you will need to earn at least $1,533.00 before taxes to make that $1000 purchase.

In other words, the $1000 couch will cost you $1533 or 153% of the sale price. So when considering a purchase, make sure you evaluate the real cost.

So another way of saying this is…

You need to earn $1533 to buy a $1000 item

You need to earn $15.3 to buy a $10.00 item

You need to earn $1.53 to buy a $1.00 item

It impacts other areas…

Let’s shift from couches to vehicles. You know that vehicle sitting in the driveway that you paid $30,000 for? You had to earn $46,000, pay the taxes, in order to bring home enough money to buy it. OUCH!

Can’t seem to get ahead?

Have you ever wondered why it feels that your money doesn’t go very far? Here is why. If I ask you how much you make, what will you tell me? 9 out of 10 times you will tell me the gross amount that you make because we normally think in gross. So if your gross income is $70,000, you are walking around thinking you make $70,000 a year, and you are beating yourself up because you are wondering why you can’t make it on $70,000 a year. The reality is if you are grossing $70,000, you are bringing home (net) somewhere in the $46,000 range. That is a long way from $70,000. Once you start thinking in net, you will find yourself less frustrated and more understanding as to why you don’t have the purchasing power you thought you had.

Tomorrow we will talk about the value of your time.

You have a choice, and the choice is yours. – Coach Bryan

Thank you for reading the My Financial Life Coach blog where we talk about money, goals, family, life events, spending, and economic news. We do make every attempt to avoid the topic of politics but we will bring up economic policies that need communicated. Our job is to educate and motivate you to the debt-free life style.

Dream

Dream a little . . . what would “Financial Freedom” look like to you? Close your eyes, can you see it? Can you taste it? Reflect on this for a few moments.

As I’ve coached over the years I have learned that you must spell out what financial freedom means to you and you must start establishing and prioritizing goals to get there. When I work with a client the first thing we do is spend 30 minutes in this area and we revisit it during the entire process. This is where you design life around family, events, etc.

Please understand that you don’t need to have every detail figured out before you start, you just need to start! Brainstorm your goals. Your goals should include financial and non-financial goals. Establishing the right goals will help you with life balance.

Goals

Your goals need to include:

Very short-term goals – (under 1 year):

Short term goals – (1-5 years):

Long term goals – (over 5 years):

Your goals should become your compass. Everything you do will be measured against your list of goals. As every new opportunity comes before you, you will evaluate it to see if the opportunity helps you toward your goals, or away from them. If it helps, consider it. If the opportunity distracts or hurts your progress towards your goals, eliminate, say no to it because it will get you off course.

Remember, your goal list is a living document. You will make changes to it as priorities change or as other life events unfold in your life.

Take Action

So today why don’t you do the following two action items.

1. Take a pencil and paper and start writing out what Financial Freedom means to you.

2. Write out your goals, breaking them into < one year, 1-5 years, and > than 5 years.

Thank you for reading the My Financial Life Coach blog where we talk about life, food, family, life events, spending, and economic news. We do make every attempt to avoid the topic of politics but we will bring up economic policies that need communicated.

Note: For the first couple of weeks of January I’m posting Sara’s (Single Mom’s Ask Sara) journey through the Balance Up program. I will be including some additional posts during this time too and then later in January you will see a little more topical structure with my posts. Enjoy!

Days 11 and 12

Day 11

Today we begin to work on our spending plan. I have done this in the past off and on, but never felt hugely successful. While I was able to make a plan and get from month to month, I didn’t ever feel like I was getting ahead.

Bryan’s spreadsheets are a little different than anything I had come up with in the past, and to be honest, it was kind of fun. I have to pause here a minute and let this soak in. I, never in my entire life, have, nor ever thought I would…say that figuring out my monthly budget was fun. Most of my bills are due around the 20th of the month and it is pretty common for me to start waking up in the middle of the night panicked about my money a few days prior. It doesn’t matter if I have the money in the bank to cover things or not. This post traumatic stress syndrome is so much a part of my monthly routine that when I wake with a start, my first thought is, “What’s the date?”

So…we’ll see how this process changes things. Bryan’s demo of this spreadsheet was fluid and easy to understand, and his tips were enouraging.

Plug your paychecks into the spreadsheet and divvy it up amongst your expenses. When you assign some money to a bill, that amount is subtracted from your total. Once you get your spreadsheet filled in, take a look to see where you can cut costs and how you want to arrange your paycheck across your expenses. I was thrilled to see that I could be putting more money on my debt that I thought. I am pretty excited to start watching those balances tick away.

Ready to come on board? Leave a money tip, and go into the drawing for a free chance to go through Balance UP!

Day 12…recording the details

I…am a big picture person. I understand details. I respect details, and when possible, I defer details. I would truly rather be at the dentist than wade through number details. (No offense Dr. Tony.)

Given this, you can probably imagine how quickly my eyes glazed over when today’s video started talking about making a separate ledger for items like eating out and car stuff. My first thought was, “How can I get around this?”

I know. That was bad. We don’t eat out. It’s not a challenge to manage our once a month pizza, so that’s one less sheet for me. My focus is paying off debt and I am not buying a thing that isn’t a necessity. When I do, I take that off the extra I am putting onto the debt. Maybe I don’t need these. I wondered, “Can I get to where I want to go without doing this part?”

I haven’t yet.

Bryan says this will take some getting used to, and to play around with it for a while. OK. I printed out my ledgers, and I’ll give it a try. Cross your fingers for me!

– Sara

Let’s hear from the readers! What part to tracking expenses do you find to be the hardest?

Interested in learning more about Balance Up? 32 online lessons taken over a 42 day period for only $29.99.

Note: For the first couple of weeks I’m posting Sara’s (Single Mom’s Ask Sara) journey through the Balance Up program. I will be including some additional posts during this time too and then later in January you will see a little more topical structure with my posts. Enjoy

Day 9

Stop watching the Joneses

Those darned Joneses! They make us keep thinking we need more and more. When will they stop consuming?

In all seriousness, it’s not the Joneses, it’s our continuous materialist sweet tooth that is causing our debt obesity.

As we learned from Bryan, we need to think of our expenditures in terms of monthly payments, the hours we must work to pay for them, and what that money costs us over time. It’s not easy to manage these ideas at first, but as will any lifestyle change, the turtle wins the race.

Start slowly, but keep going. We discussed giving to others on Day 7. Today we are encouraged to pay ourselves, and to do it first. I know that is so very hard when you don’t have enough money to get to the end of the month. Even if it is $5 a month, set it aside for yourself. Do you best. You will just feel better.

Now, how can we impact our monthly expenses?

Do you have a mortgage? Bryan encourages us to consider a bi-monthly payment, or an extra payment over the course of a year. Either of these approaches will take years off your mortgage.

Can you decrease your electricity? Changing to fluorescent light bulbs can decrease your lighting costs by 75%, not to mention decreasing your lightbulb replacement costs. The price of these bulbs has decreased enormously over the years and it is no longer a burdensome purchase.

Turn off and unplug. You can save up to 8% in electrical costs by turning off lights, and uplugging and other electrical appliances such as TVs, computers, and chargers when not in use.

Change your showerhead. Switching to a low water showerhead, or even toilet if you are able, will decrease your water costs, and you won’t even notice the change. (I grew up with a well as our water supply, and the water bill is simply one I just hate to pay.)

Do you pay for voicemail? Even if the voicemail is only $1 month, over 20 years that will cost you $240, if the rate never goes up.

Bryan has even more tips for Day 9, and none are the least bit painful. Remember, every dollar you save per month on your regular bills, is money you can save, use to pay debt off, or buy some great shoes!

Bryan has offered to give away Balance UP to one visitor of Single Moms Ask Sara, and to a friend of that visitor. To enter, simply go to my Money Saving Tips and leave your favorite tips for my readers.

Day 10!

All caught up! Today is tip day! Bryan offers a series of money saving tips. Today I am going to give you a few of his, and a few of mine.

I have to confess that I am feeling much more relaxed and much more confident about money. It is a relief to know that I have been on the right track, it was a shock to look at my finances across the long term, and it is encouraging that Bryan thinks that no matter where you are in your financial life, you can get on track.

TipsBryan: Don’t grocery shop hungry, and shop from a list.Sara: Make your list from a menu. For a downloadable menu and shopping list, check my Free Downloads page.

Bryan: Use coupons. Check Bryan’s site for great coupon websites. (scroll down tot he links section)Sara: If the house brand is cheaper (and it often is) don’t spend the extra money to use the coupon on the name brand item. Be sure to sign up for your store’s discount program.

Bryan:Don’t waste food. Make larger servings to use for other meals or to take for lunch.Sara:Incorporate leftovers into your menu. Today’s leftover roast is tomorrow’s beef and noodles or roast beef sandwiches.

Bryan: Go to www.gasbuddy.com to check gas prices in your area.Sara: Make sure your change your oil regularly, and your tires are inflated to the proper amount. Both of these can affect your gas mileage.

Interested in learning more about Balance Up? 32 online lessons taken over a 42 day period for only $29.99.

Let’s hear your comments…1) What are your 1 or 2 favorite money saving tips? 2) Have you stopped over at Sara’s website to post your money saving ideas? All money saving posts will be entered in a drawing to win a Balance Up program.

Related Articles – (Note from Bryan – Along with some of my articles below I also included some articles from folks who I read on a regular basis…enjoy!)

Note: For the first couple of weeks I’m posting Sara’s (Single Mom’s Ask Sara) journey through the Balance Up program. I will be including some additional posts during this time too and then later in January you will see a little more topical structure with my posts. Enjoy!

Days 7 and 8…Tracking the Bucks

Day 7

Only 42% of people track their spending.

This means, as Bryan points out, 58% of people do not track their spending. I do track my bucks. I might not track for a week or two, but I always balance up (no pun intended) when I sit down to pay my monthly bills. I was surprised to learn that so many people do not track their spending.

Bryan reminds us to think about how much money we actually have to spend over our lifetimes. Think about how much money you make a year (the net amount) and write down your number. Now multiply the number by 10. This is the amount of money (discounting raises) that you have to manage over a ten year period. Now multiply by 20 years, and then by 30 years. You likely have much more to manage than you ever realized.

Looking at that grand total, it is much easier to see how you can become debt free and use your money to fulfill your dreams.

Not feeling it? Still having that sick feeling in the pit of your stomach? Bryan says this is when you should pull together $10 or $20 and give it to someone else. Suze Orman echos this sentiment explaining that her clients who had the most money were the ones who gave away the most money, and Wayne Dyer tells us to give away the very thing we want to receive. Someone is always worse off than you. By giving, you shift your focus away from yourself and your issues, and you do something wonderful for someone else.

Day 8

Monthly payments rob you of your future wealth.

I hate those monthly payments. It’s one thing to be paying something off and knowing those payments will someday disappear…but the phone, the electric, the gas…I hate paying those every month…forever and ever.

But what about those payments you don’t think about. What about that $1 coffee everyday? That is $30 a month, or $13,000 over 20 years. What about that $25 or $50 mani-pedi payment? That every other month haircut? Etc.

By breaking your spending down to a per month basis it is much easier to track your spending. The process can cause a few butterflies, but ultimately, knowledge is power. You can’t manage it if you don’t about it.

Almost caught up! Ready for Day 9!

– Sara

Interested in learning more about Balance Up? 32 online lessons taken over a 42 day period for only $29.99.

Let’s hear your comments…1) Do you track your spending? 2) What are 1 or 2 items you can eliminate that will give you cash to apply to your debts?

Related Articles – (Note from Bryan – Along with some of my articles below I also included some articles from folks who I read on a regular basis…enjoy!)